Samrat Forgings Limited

Industrials — Industrial Distribution · BSE

₹218.90−₹1.10 (−0.50%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:51 pm

Understanding the Business

Company site ↗

The 60-second version of Samrat Forgings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Samrat Forgings Limited provides forgings in various dimensions and profiles in India and internationally. It offers farm equipment, such as crank shafts, cam shafts, stub axles, and arms; automotive equipment; and earth moving and construction equipment.

IndustryIndustrial Distribution

SectorIndustrials

Employees844

Annual revenue₹203 Cr

How does it make money?

Turns over ₹203 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 844 employees supports ₹24.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹24.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +12% while net margin moved -20% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+12%

Margin effect-20%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.8% — barely ahead of inflation
✗ Profit has declined at 3.5% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -4.8% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

36/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

23.9x

3Y Median

31.9x

40 monthly readings · mean 36.3x · range 15.9x–63.8x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 25% below its 3y median of 31.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 73% below the peer median of 88.8x.

vs. its own history

Cheap

31.9x median over 40 months · -25%

vs. sector peers

Cheap

88.8x median of 3 peers · -73%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.3x

PEG

1.31

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 17.1% to 10.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.5% to 13.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 58% over 3 years, from ₹62 Cr to ₹97 Cr.
🔴High leverageFinancial
Debt/Equity of 2.35x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🟡Inventory building faster than salesFinancial
Inventory up 38% against revenue up 12% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.98 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 25% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 73% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 5.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 3.8% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 17.1% to 10.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 7%✓ 9.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 3.8% CAGR
Latest reported year was -4.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

4 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹109 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.64x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.16

Profitable

Profitable on a per-share basis

ROE

10.6%

Moderate

Moderate capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.35x

High

High leverage

Revenue Growth (YoY)

-4.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

18.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.4%

Average

Average margins

Net Margin

2.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.98

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

215.9 / 226.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹181 Cr	₹162 Cr	₹191 Cr	₹203 Cr	+3.8%
EBITDA	₹15 Cr	₹13 Cr	₹18 Cr	₹18 Cr	+6.8%
EBITDA Margin	8.3%	8.2%	9.3%	9.0%	—
PAT (Net Profit)	₹5 Cr	₹3 Cr	₹5 Cr	₹4 Cr	-3.5%
EPS	₹9.77	₹5.95	₹10.2	₹8.78	-3.5%
ROE	17.1%	9.4%	13.8%	10.6%	—
ROCE	18.5%	12.7%	14.9%	13.1%	—
Total Debt	₹62 Cr	₹78 Cr	₹89 Cr	₹97 Cr	+16.4%
Free Cash Flow	-₹7 Cr	-₹4 Cr	-₹4 Cr	₹3 Cr	—

🟢 Revenue has grown at 3.8% a year over 3 years.

🟢 EBITDA has grown at 6.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 9.0% over 3 years.

🔴 PAT (Net Profit) has shrunk at 3.5% a year over 3 years.

🔴 EPS has shrunk at 3.5% a year over 3 years.

🔴 ROE has fallen from 17.1% to 10.6% over 3 years (-6.5 pts).

🔴 ROCE has fallen from 18.5% to 13.1% over 3 years (-5.4 pts).

🔴 Total Debt has grown at 16.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹7 Cr to ₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹197 Cr

Total Liabilities

₹156 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹21 Cr

Capex

-₹17 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

97.3%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive1 mixed4 general

Samrat Forgings Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 26 Aug

Samrat Forgings ratifies MD and director reappointments at AGM

scanx.trade, 25 Sept

Samrat Forgings Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 26 Aug

METALIC TECHNOFORGE LTD Share Price: Price Rise Analysis

Univest, 20 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Shanti Gold International standalone net profit rises 104.87% in the June 2026 quarter

Business Standard, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Samrat Forgings Limited (543229) Company Information

Simply Wall Street, 08 Aug

Watch Items

Revenue growth is negative (-4.8%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑